Reverse mortgages are becoming increasingly popular among seniors. Thanks to the HECM program, the elderly who are on their retirement years can tap into their home equity and turn it into a source of income which they will receive every month without having to worry about moving out of their homes. They can use the additional cash they get from the loan to remodel their houses or pay for their expenses. Reverse mortgages can also help seniors purchase a new house in retirement.
Reverse Mortgage: HECM For Purchase Program
HECM or Home Equity Conversion Mortgage for Purchase Program helps seniors purchase a new primary house. It makes the home buying and selling process much easier by consolidating them into one transaction. This process saves them money but cutting back on their living costs. Seniors who downsize could also use the remaining cash for other reasons. In case you qualify for a home equity conversion mortgage for purchase program, you don’t need to pay a mortgage bill every month. You don’t even have to pay back the loan until you decide to move out or after your passing. And because it is a non recourse type of loan that is backed by the FHA, you don’t need to pay back more than the home’s value, even if the balance of the reverse mortgage Myrtle Beach is much higher.
HECM for Purchase Loan Qualification
- Homeowner must be at least 62 years old
- The house to be purchased should be the primary residence
- The purchase must be done within the 60 day period following the closing date
- The new house must be a single family home, two to four unit house, or a condo that is according to the requirements of the FHA.
How much you can borrow through this program will be influenced by several factors. For instance, your lender will take into account the youngest borrower’s age, the appraised value of the house, downpayment size, and the current interest rates. Fortunately, you don’t have to worry about your household income and credit score because they won’t affect your odds of qualifying for the loan. Generally speaking, the older the borrower, the more money he or she will be able to get.
Costs To Consider
Apart from the downpayment, you also need to know that you have to pay for fees like property taxes and closing costs. You have to shoulder the mortgage insurance premiums as well. You’ll have to make the first payment upfront and the remaining amount will be paid over the lifespan of the reverse mortgage loan.
Even though you can avoid paying the closing cost, you can still negotiate the costs. That’s the reason why you have to shop around for the very best rates first. Obviously, when the cost of obtaining an HECM loan outweighs the offered benefits, then you may have to find a different financing option.
If you’d like to downsize or move in retirement, the HECM for Purchase loan could be a good solution. However, before you decide to apply for one, you should find out first if it is the best financial option for you and your family.
For guidance, don’t hesitate to get in touch with Reverse Mortgage Specialist.
Reverse Mortgage Specialist
1293 Professional Drive, Suite 204
Myrtle Beach, SC 29577